Despite growing attention to the risks for corporations, support by mutual funds for resolutions
addressing political spending decreased in 2012.

SocialFunds.com --
Why do corporations continue to engage in political spending, when studies clearly demonstrate that better corporate governance is associated with reduced
political spending?

"Political spending poses a range of risks to companies – reputation,
legal and business – and the spike in secret political spending can distort markets and outcomes,"
Bruce Freed of the Center for
Political Accountability (CPA) recently told SocialFunds.com.

While the Securities and Exchange
Commission (SEC) is reportedly considering regulations on disclosure of political spending by
corporations, it has been left up to sustainable investors and other governance advocates to engage
with companies on the issue. And while many resolutions addressing political spending have
attracted strong support, the nation's largest mutual funds actually recorded a slight decrease in
support, according to a study
conducted by Jackie Cook of Fund Votes for
CPA.

The study analyzes the votes by 40 of the largest mutual funds, with a combined $2.7
trillion in assets under management.

In 2011, the mutual funds supported a record 35% of
resolutions addressing political spending, but this year support decreased slightly, to 34%.

"As in previous years, the three largest mutual fund families in the United States failed to
support a single political spending disclosure resolution," the study found. "Fidelity continues to
abstain on all political spending resolutions. Vanguard voted against five resolutions in the 2012
proxy season (abstaining on all others), breaking a long record of abstentions. American opposed
all 29 resolutions it voted on during the 2012 proxy season, having only ever supported two out of
the 194 political spending resolutions that it had voted on previously."

On the other
hand, 13 of the mutual funds supported more than half the resolutions this year, and four funds
supported disclosure more than 80% of the time. AllianceBernstein, a signatory to the United
Nations' Principles for Responsible Investment
(PRI), increased its support from just five percent in 2011 to 90% this year. And DWS
Investments, which did not support a single resolution in 2011, voted in favor of 83% of them this
year.